In a dramatic escalation of political tensions, US President Donald Trump has openly threatened to cut federal support to Elon Musk’s businesses, including Tesla and SpaceX, amid a growing dispute over electric vehicle (EV) mandates and a controversial spending bill.

Posting late Monday night on Truth Social, Trump targeted Musk’s recent criticism of the White House’s massive tax and immigration bill, warning that without government subsidies, Musk would have to shut down operations and “head back home to South Africa.”

“Elon Musk knew, long before he so strongly endorsed me for President, that I was strongly against the electric vehicles mandate,” Trump wrote, reiterating his long-standing opposition to federal policies promoting EV adoption.
“No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE,” he added, referencing SpaceX’s launch programs and Tesla’s EV manufacturing.

The Spark: A Disputed Spending Bill

The trigger behind this high-profile spat is the pending vote on the White House’s expansive spending legislation, dubbed “One Big Beautiful Bill” by Trump himself. The bill seeks to extend the 2017 Trump-era tax cuts while overhauling immigration and drastically reducing social welfare expenditure.

However, critics argue that the bill would add $3 trillion to the national debt, disproportionately harm lower-income groups, and aggressively push a conservative economic agenda that consolidates wealth and power.

One of the most vocal critics has been Elon Musk, who took to X (formerly Twitter), denouncing the bill and warning of severe political consequences for lawmakers who support it.

“Every member of Congress who campaigned on reducing government spending and then immediately voted for the biggest debt increase in history should hang their head in shame,” Musk posted.

Musk Threatens to Form a New Political Party

In a stunning twist, Musk threatened to launch a new political party if the bill passes.

“If this insane spending bill passes, the America Party will be formed the next day. Our country needs an alternative to the Democrat-Republican uniparty so that the people actually have a VOICE,” Musk declared on X.

The post has since gone viral, igniting debates about the potential rise of a third major political party in the United States, possibly led by one of its most influential tech entrepreneurs.

Trump Strikes Back: Threats, Allegations, and DOGE

Trump’s response was immediate and blistering. Not only did he dismiss Musk’s political aspirations, but he also called out the billionaire’s dependence on federal subsidies, claiming Musk may be “the largest recipient of government aid in history.”

He further proposed an investigation into Musk’s federal funding by DOGE — the Department of Government Efficiency — which Musk himself once led during the early days of his involvement in Washington’s regulatory space.

“Perhaps we should have DOGE take a good, hard, look at this? BIG MONEY TO BE SAVED!!!” Trump posted.

DOGE, an oversight agency created during Trump’s first term and often compared to a political tool for auditing government waste, has now been thrust into the center of this high-stakes power struggle.

What’s at Stake for Musk

Musk’s companies — Tesla, SpaceX, Starlink, Neuralink, and The Boring Company — have all benefited from federal contracts, tax breaks, and incentives over the years. Tesla, in particular, has enjoyed subsidies linked to EV production and battery innovation, while SpaceX holds billions in federal launch and satellite contracts, including with NASA and the Department of Defense.

A full-scale withdrawal of government support, as threatened by Trump, could cripple Musk’s operations, though analysts suggest that his growing global presence and private capital access could cushion the blow.

Still, such rhetoric introduces political risk for companies deeply integrated with public infrastructure, especially those reliant on regulatory approvals and government partnerships.

Trump vs Musk: A Rocky Relationship

The relationship between Trump and Musk has long been complicated and transactional. While Musk endorsed Trump’s re-election bid, he has also challenged several of Trump’s policies, including climate change denial, social media censorship, and now the spending bill.

The EV mandate, which Trump called “ridiculous,” has been a particularly sore point. Trump has framed it as a government overreach, while Musk sees it as essential to reducing emissions and advancing energy independence.

The tension underscores a broader ideological divide between conservative populism and techno-libertarianism, with Musk increasingly embracing the political disruptor role.

Fallout Across Washington and Wall Street

Trump’s attack has already caused a stir in Washington and on Wall Street:

• Democrats have seized the moment to portray the GOP’s internal divisions, with many mocking Trump’s threats as “petty retaliation.”

• Republicans remain divided, with some quietly aligning with Musk’s concerns over fiscal responsibility.

• Investors reacted cautiously, with Tesla shares showing minor volatility amid fears of federal funding withdrawal.

Will Musk Actually Launch a Party?

Political analysts remain skeptical about Musk’s threat to launch the America Party, pointing out that while tech titans have dabbled in politics, few have successfully transitioned into institutional power.

However, given Musk’s financial resources, massive follower base, and cultural influence, the possibility of a viable centrist or populist third party is no longer outlandish — especially in a politically fatigued America.

A new party could attract independents, libertarians, and younger voters disillusioned with both major parties. Whether this will become reality remains to be seen, but the statement alone has added fuel to an already polarized landscape.

Conclusion

The public fallout between Donald Trump and Elon Musk marks a new chapter in America’s political and tech ecosystem. What began as a policy disagreement over EV mandates and a controversial spending bill has now evolved into a personal and public power struggle between a sitting president and one of the most influential entrepreneurs of the century.

With threats of cutting off rocket launches, subsidies, and EV incentives, Trump has effectively weaponized the government’s fiscal tools to silence dissent. In contrast, Musk’s defiance, and his call for a new political alternative, signals the rising influence of non-traditional power centers in American politics.

As Congress nears a final vote on the bill, all eyes are on Washington—and on Elon Musk, whose next move could reshape not just the tech industry, but potentially the American political landscape.

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